2021 (4) TMI 1194 - AT - Customs

LCD modules wrongly classified under 90299000, should be under 9013. Precedents crucial; absence of Show Cause Notice violated natural justice. Appeal allowed.

M/s. Continental Automative Components (India) Pvt Ltd Versus C. C-The Principal Commissioner Customs Bangalore

The Tribunal held that the classification of LCD modules under 90299000 was incorrect and should be classified under 9013. The appellant's reliance on ... Classification of imported goods - LCD-Module - classified under CTH 90139010 having a Nil rate of BCD or Original dated 12.10.2009 holding that LCD modules imported by the appellant shall be classified? - HELD THAT:- The appellant has imported 576 pieces of LCD modules and accordingly filed bill of entry giving the details of the same and the goods were physically examined by the officers of SIIB and the stand of the appellant from the very beginning was that as per the technical write up, which was submitted to the Department, clearly shows that these LCD are used in the instrument cluster manufacture by the appellant and which instrument cluster in turn disclosed the main Kilometer reading, Day Trip reading and Clock and all these details are matched with the details in bill of entry - the Order-in-Original was passed without issuing the SCN which is also in violation of principles of natural justice, in view of the decision in the case of ZINC PRODUCTS VERSUS UNION OF INDIA [1991 (2) TMI 126 - HIGH COURT OF JUDICATURE AT MADRAS]. The appellants have been earlier importing the said items and the appellants vide its letter dated 30.11.2009 informed the Customs Authorities that since April 2009, they had seven instances of import of LCD and in five of them, the item was correctly dispatched as Liquid Crystal Display and in the remaining two, though, the imported item was merely a Liquid Crystal Display which was mentioned as LCD module incorrectly and that the imported LCDs were used in the manufacture of instrument cluster and that these are not part of speedometer - thus, the impugned order classifying the said goods under 90299000 is not legally sustainable Appeal allowed - decided in favor of appellant. Issues Involved:1. Classification of imported LCD modules.2. Adherence to principles of natural justice.3. Reliance on precedents and judicial decisions.Issue-wise Detailed Analysis:1. Classification of Imported LCD Modules:The primary issue revolves around the classification of 576 pieces of LCD modules imported by the appellant. The appellant classified these under CTH 90139010, which has a Nil rate of BCD, while the original authority reclassified them under CTH 90299000, subjecting them to a 10% duty. The appellant argued that the LCD modules are used in instrument clusters for vehicles, displaying information such as Kilometer reading, Day Trip reading, and Clock. They cited the Supreme Court decision in Secure Meters Ltd. vs Commissioner of Customs, which classified similar LCDs under chapter heading 9013.80 as liquid crystal devices. The Tribunal, after reviewing the technical details and previous imports, found that the LCDs should be classified under Tariff Item 9013. This conclusion was supported by the Supreme Court's interpretation that LCDs, even when used in specific applications like speedometers, should be classified under their specific heading if they constitute articles described more specifically in other headings.2. Adherence to Principles of Natural Justice:The appellant contended that the Order-in-Original was passed without issuing a Show Cause Notice (SCN), violating principles of natural justice. The Tribunal agreed, referencing the decision in Zinc Products Vs UOI, which emphasizes the necessity of issuing an SCN to ensure fair hearing and due process. The Tribunal noted that the original authority did not seek a technical opinion despite the technical details provided by the appellant, further undermining the fairness of the process.3. Reliance on Precedents and Judicial Decisions:The appellant's argument heavily relied on judicial precedents, particularly the Supreme Court's decision in Secure Meters Ltd., which was pivotal in their case. The Tribunal acknowledged that the Commissioner (Appeals) had incorrectly relied on the Tribunal's earlier decision in Secure Meters Ltd., which had been overturned by the Supreme Court. The Tribunal also cited several other decisions where similar products were classified under Tariff Item 9013, reinforcing the appellant's position. The Tribunal's analysis included detailed references to the Supreme Court's interpretation of LCDs and their classification under Chapter Heading 9013.80, emphasizing that parts and accessories identifiable as suitable for use with specific machines should be classified under their respective headings unless they constitute articles described more specifically in other headings.Conclusion:The Tribunal concluded that the impugned order classifying the LCD modules under 90299000 was not legally sustainable. It set aside the order, allowing the appeal with consequential relief. The decision was pronounced in the open court on 26/04/2021.